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CM Finance Inc Reports Results for Its Fiscal Second Quarter Ended December 31, 2015

NEW YORK, Feb. 08, 2016 (GLOBE NEWSWIRE) -- CM Finance Inc (Nasdaq:CMFN) (“CMFN” or “the Company”) today announced financial results for its fiscal second quarter ended December 31, 2015.


HIGHLIGHTS

  • Increased quarterly distribution 1.4% to $0.3516 per share
  • Decline in NAV per share to $12.17 from $13.65 per share at September 30, 2015
  • Investment portfolio declined by $28.6 million, or 8.9%, from last quarter, to $292.8 million at fair value primarily due to decline in fair value of $21.8 million
  • Weighted average yield of debt portfolio, at cost, of 10.31% compared to 11.02% at September 30 , 2015
  • One debt investment made during the quarter with a yield, at cost, of 10.5%
  • Declared a regular quarterly distribution of $0.3516 per share for the quarter ending March 31, 2016, payable on April 7, 2016, to shareholders of record as of March 18, 2016.

Portfolio results, as of December 31, 2015:
Total Assets$333.7mm
Investment portfolio, at fair value$292.8mm
Net Assets$166.4mm
Weighted Average yield on debt investments, at cost 10.31 %
Net Asset Value per share$12.17
Portfolio activity in the current quarter:
Number of new investments 1
Total capital invested$10.0mm
Proceeds from repayments, sales, and amortization$18.2mm
Number of portfolio companies, end of period 22
Net investment income$6.3mm
Net investment income per share$0.46
Net decrease in net assets from operations$15.4mm
Net decrease in net assets from operations per share$1.13
Distribution declared per share (paid January 5, 2016)$0.3469

Mr. Michael C. Mauer, the Company’s Chief Executive Officer, said, “Volatility in the global credit, equity and commodity markets was the theme in the latter part of 2015 and has continued into early 2016. Given that backdrop, we have been cautious in the deployment of our capital, and continue to focus on directly originated credit opportunities.”

On February 2, 2016, the Company’s Board of Directors declared a distribution for the quarter ended March 31, 2016 of $0.3516 per share payable on April 7, 2016 to shareholders of record as of March 18, 2016.

The Company reported net investment income of $6.3 million, or $0.46 per share, and net realized and unrealized losses of $21.8 million, or $1.59 per share, for the quarter. The total net decrease in net assets resulting from operations for the quarter was $15.4 million, or $1.13 per share. At December 31, 2015, the Company’s net asset value (NAV) per share was $12.17.

Portfolio and Investment Activities

During the quarter, we added one new investment of $10.0 million to a new portfolio company and realized $18.2 million of repayments, sales proceeds and amortization. The decrease in our net investments after taking into account realized and unrealized gains was approximately $28.6 million (at fair value). Our new portfolio company investment during the quarter has a yield of 10.5%.

At December 31, 2015, our investment portfolio of $292.8 million (at fair value) consisted of investments in 22 portfolio companies, of which 50.7% were first lien investments, 46.1% were second lien investments, 3.1% were unsecured investments and 0.1% were equity and warrant positions. At December 31, 2015, our average portfolio company investment at fair value was $13.3 million. At December 31, 2015, we had one loan, or 2.6% of our portfolio, at fair value, on non-accrual status.

As of December 31, 2015 and June 30, 2015, our weighted average total yield of debt and income producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 10.31% and 10.91%, respectively.

Capital Resources

As of December 31, 2015, we had $16.4 million in cash, $9.7 million in restricted cash, and $5.6 million of capacity under our revolving credit facility. Our net assets totaled $166.4 million.

Subsequent Events
Subsequent to quarter end, there were no significant investments and sales/repayments.

CM Finance Inc and subsidiaries
Consolidated Statement of Assets and Liabilities
December 31, 2015 (unaudited) June 30, 2015
Assets
Non-controlled, non-affiliated investments, at fair value (amortized cost of $325,256,635 and $336,092,639 respectively)$292,773,149 $330,323,856
Derivatives, at fair value (cost $0 and $0, respectively) 12,081,994 1,845,768
Cash 16,419,289 21,535,492
Cash, restricted 9,678,911 3,433,704
Interest receivable 2,554,627 2,900,804
Deferred offering costs 186,513 186,513
Prepaid expenses and other assets 54,035 232,704
Total Assets$333,748,518 $360,458,841
Liabilities
Notes Payable:
Term loan$102,000,000 $102,000,000
Revolving credit facility 44,391,680 48,847,459
Deferred debt issuance costs (2,238,881) (2,331,035)
Notes Payable, net 144,152,799 148,516,424
Payable for investments purchased 112,523 2,988,655
Distributions payable 4,742,575 4,741,174
Derivatives, at fair value (cost $0 and $0, respectively) 12,081,994 1,845,768
Base management fees payable 2,897,155 1,420,978
Income-based incentive fees payable 1,503,698 1,723,260
Deferred financing costs payable 879,042 1,525,000
Interest payable 186,364 168,658
Accrued expenses and other liabilities 787,205 578,075
Total Liabilities 167,343,355 163,507,992
Net Assets
Common Stock, par value $0.001 per share (100,000,000 shares authorized, 13,671,302 and 13,667,267 shares issued and outstanding) 13,671 13,667
Additional paid-in capital 199,463,837 199,418,478
Accumulated net realized gain (364,336) 3,700,400
Accumulated distributions in excess of net investment income (224,523) (412,913)
Net unrealized appreciation on investments (32,483,486) (5,768,783)
Total Net Assets 166,405,163 196,950,849
Total Liabilities and Net Assets$333,748,518 $360,458,841
Net Asset Value Per Share$12.17 $14.41

CM Finance Inc and subsidiaries
Consolidated Statement of Operations (Unaudited)
For the three months ended December 31, For the six months ended December 31,
2015 2014 2015 2014
Investment Income:
Income:
Interest income$8,707,519 $8,888,600 $18,303,132 $15,820,606
Payment in-kind interest income 721,364 162,832 960,603 723,852
Other fee income 529,819 155,919 563,561 523,762
Total investment income 9,958,702 9,207,351 19,827,296 17,068,220
Expenses:
Interest expense 1,007,104 895,438 1,992,092 1,614,314
Amortization of deferred debt issuance costs 364,195 340,590 712,654 513,482
Base management fees 1,444,998 1,270,688 2,897,155 2,378,141
Income-based incentive fees - 1,160,012 1,229,032 2,129,470
Capital gains incentive fees - 764,821 222,682 902,870
Custodian and administrator fees 136,038 81,467 211,500 170,157
Directors' fees 96,750 96,750 464,768 211,500
Professional fees 172,434 397,008 438,131 607,231
Allocation of administrative costs from advisor 161,180 153,418 188,646 344,838
Insurance expense 102,443 110,747 287,031 221,493
Other expenses 158,475 60,777 207,467
Total expenses 3,643,617 5,331,716 8,643,691 9,300,963
Waiver of income-based incentive fees - - - (582,829)
Waiver of capital gains incentive fees - (736,865) - (874,914)
Net expenses 3,643,617 4,594,851 8,643,691 7,843,220
Net investment income$6,315,085 $4,612,500 $11,183,605 $9,225,000
Net realized and unrealized losses on investment transactions:
Net realized gains (losses) on investments 106,604 1,044,073 301,924 920,475
Net change in unrealized (depreciation) / appreciation on investments (21,819,026) 2,427,371 (26,714,703) 2,531,909
Net realized and unrealized losses (21,712,422) 3,471,444 (26,412,779) 3,452,384
Net increase in net assets resulting from operations($15,397,337) $8,083,944 ($15,229,174) $12,677,384
Basic and diluted:
Net investment income per share$0.46 $0.34 $0.82 $0.68
Earnings per share$(1.13) $0.59 $(1.11) $0.93
Weighted Average Shares of Common Stock Outstanding 13,671,273 13,666,666 13,669,733 13,666,666

About CM Finance Inc

The Company is an externally-managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The Company seeks to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation and amortization of at least $15 million. The Company’s investment activities are managed by its investment adviser, CM Investment Partners LLC. To learn more about CM Finance Inc, please visit www.cmfn-inc.com.

Forward-Looking Statements

Statements included herein may contain “forward-looking statements,” which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein except as required by law. All forward-looking statements speak only as of the date of this press release.

Contacts CM Finance Inc Investor Relations Email: investorrelations@cmfn-inc.com Phone: 212-257-5199

Source:CM Finance